Sooner or Later, it starts to look like real money…

(picture found here)

I heard an interesting podcast the other day on Planet Money, where a school teacher gave the broadcasters an idea on how to get your head around huge numbers.  Really huge numbers, like billions and trillions.  It’s true, it’s sometimes difficult to get our heads around how big really big numbers are.  So I started thinking about when money starts getting confusing for me, ignoring the tens and hundreds and going straight for the thousands.  For example, if I have $1, that’s easy to get my head around.  I would have no problem spending $1.  That’s not even enough to pay for a diet coke at 7-11.

$1 – goes towards a diet coke at 7-11
By adding a comma, we get to $1,000, one thousand dollars.
$1,000 – again, easy to spend.  Not enough to put Maya through college (HA!), or even to put new carpet in our condo, but maybe enough for some furniture.
By adding a comma, we get to $1,000,000, one million dollars.
$1,000,000 – still not too hard to spend.  I can blow that on a house in our little town, and it won’t even be the nicest house in town.  Pretty nice, with housing prices where they are, but not really fancy.
By adding a comma, we get to $1,000,000,000, one billion dollars.  Suddenly, I’m in over my head.  I have no idea how to get my brain around this number, and of course I couldn’t spend it if I wanted to.  Didn’t take long, did it?

So the podcast had an interesting way of figuring out what a billion is like.  They interviewed a teacher from Wisconsin who starts with a stack of 60 $1 bills.  He counts them out at a rate of 1 per second, and tells them that that is $60 in one minute.  So if you’re counting at that rate, $60 a minute, how long does it take to get to big numbers?  They figured it out on the podcast, and I found it pretty interesting.  They didn’t post the numbers on their blog, so I thought I would do that for you here.

$60 takes one minute to count.
$1,000,000 (1 million) takes 11.7 days to count.
$1,000,000,000 (1 billion) takes almost 32 years to count.
$1,000,000,000,000 (1 trillion) takes about 32,500 years to count.  That’s 32 THOUSAND YEARS.  Go back that far, and we’re talking Neanderthals maybe.  Cave drawings.  That’s a long time. Really long.

They then used the numbers that are being bandied about with our global financial situation, and figured them out.  These are their numbers, and I haven’t done any math to verify that I think they’re right.  I’m sure they are.

TARP Bailout funds  – $700,000,000.  Going back in time for the amount of time it would take  to count that at a rate of $1 per second would take 22,000 years.  That puts us at 20,000 B.C.
Fed Program – $1,200,000,000 (1.2 trillion) 39,000 years
Chinese bailout $$ – $1,940,000,000,000 (1.94 trillion) 63,000 years
The amount of those AIG Bonuses was estimated at taking about 5 years to count.

Interesting, huh? I love Planet Money, and how they break down the concepts of the financial mess into really easy to understand concepts. Check them out sometime.